Startup Asia: Kai-Fu Lee Sounds Off About Power of China’s Tech Leaders

Kai-Fu Lee, who’s been in leading roles throughout China’s tech innovation development, sounds off about whether Chinese tech stocks are overvalued. He says, absolutely not, and named the powerful leadership of Tencent and Alibaba in the China market for reasons why he is bullish. He cited the 12 billion huge number of red envelopes handed out through WeChat and QQ during Chinese New Year as an example. And Lee, who heads up China tech investment firm Innovation Works, noted that China’s tech economy will keep the overall economy growing. See interview on Bloomberg with Kai-Fu Lee on China tech trends. See post at Forbes.Chinese e-commerce giant Alibaba has led a $793.5 million Series C round for U.S. VR startup Magic Leap, in a move that brings its valuation to $4.5 billion and sees Alibaba executive vice chairman Joe Tsai join the startup’s board. Google, Qualcomm, Legendary Entertainment, KPCB, KKR, Andreessen Horowitz and Paul Allen’s Vulcan Capital, among others, also participated. The funding amount is noticeably high for a startup that has yet to launch a product, and follows $592 million of prior funding.
The new funds will help Magic Leap get its product to market faster. Bringing Alibaba on board is a way of developing a strategic relationship in the Chinese market, as well as potentially incorporating the startup’s technology into Alibaba’s e-commerce experience for buyers. Alibaba, which has begun working with other U.S. companies such as Disney on China distribution, is betting big on potentially transformative technology.

Chinese mobile game company Linekong Interactive has turned Westward by announcing a $20 million investment in a new U.S. subsidiary, based in Burlingame in Silicon Valley. The new office is envisioned as a point of access for U.S. partners, R&D efforts and distribution, as well as a launch pad for creating new gaming content for global markets. Linekong U.S. already boasts a team of 25, including former employees of Disney, Warner Brothers, Zynga and Chartboost, and is open to acquisition opportunities as one way to continue to acquire Western game development talent.
Linekong was started in 2007, made the transition from mobile games in 2013, and went public in 2014 on the Hong Kong stock exchange. The Beijing-based firm ranked 10th among all mobile game developers in China in 2014, and currently reports more than 3.6 million monthly active users.

Matrix Partners and Vision Capital have led a Series “A+” funding round of KaiStart, a specialized crowdfunding platform based in China and launched in April 2015. The startup had completed a $5.2 million Series A in December, led by domestic angel investors and joined by nine domestic institutional investors. This latest round is notable for the role of two prominent investors: Managing Partner Chuansheng Xu from Matrix, who previously led investments in Baidu, and Vision Capital founder Yongming Wu, one of Alibaba’s board members and among its first 20 members. As part of the deal, both Xu and Wu have joined the board of KaiStart.
The crowdfunding platform stands out for primarily funding passion projects, such as a craftsman who makes toys out of old stools, and a museum for antique Chinese books. KaiStart often visits founders, filming their campaign video for free and taking 5% of successful campaigns’ total amount.

INDIA

Nexus Venture Partners and Blume Ventures have led an undisclosed investment amount in Turtlemint, a Mumbai-based startup that aggregates car and health insurance options on mobile and uses over 20 personal factors to aid in selecting a proper policy. The company’s network of offline partners then helps to complete the insurance purchase. Turtlemint plans to use its new funds to scale up technology and operations, add life insurance to its product offerings, and expand to 100+ cities in the next few months.
Nexus Venture Partners, one of the top VC firms in India, logged some 25 investments in 2015. The firm is focused on early-stage deals and has backed companies such as online marketplaces ShopClues and Snapdeal, and logistics service Delhivery.